Correlation Between COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between COSCO SHIPPING Holdings and Hapag Lloyd Aktiengesellschaft, you can compare the effects of market volatilities on COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in COSCO SHIPPING with a short position of Hapag-Lloyd Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha.

Diversification Opportunities for COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha

0.46

Correlation Coefficient

COSCO SHIPPING  Hapag-Lloyd Aktiengesellscha

Very weak diversification

The 3 months correlation between COSCO and Hapag-Lloyd is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding COSCO SHIPPING Holdings and Hapag Lloyd Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag-Lloyd Aktiengesellscha and COSCO SHIPPING is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on COSCO SHIPPING Holdings are associated (or correlated) with Hapag-Lloyd Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag-Lloyd Aktiengesellscha has no effect on the direction of COSCO SHIPPING i.e., COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha go up and down completely randomly.

Pair Corralation between COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha

Assuming the 90 days horizon COSCO SHIPPING Holdings is expected to under-perform the Hapag-Lloyd Aktiengesellscha. But the pink sheet apears to be less risky and, when comparing its historical volatility, COSCO SHIPPING Holdings is 1.2 times less risky than Hapag-Lloyd Aktiengesellscha. The pink sheet trades about -0.04 of its potential returns per unit of risk. The Hapag Lloyd Aktiengesellschaft is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  8,137  in Hapag Lloyd Aktiengesellschaft on December 28, 2024 and sell it today you would lose (237.00) from holding Hapag Lloyd Aktiengesellschaft or give up 2.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

COSCO SHIPPING Holdings  vs.  Hapag Lloyd Aktiengesellschaft

COSCO SHIPPING Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days COSCO SHIPPING Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, COSCO SHIPPING is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hapag-Lloyd Aktiengesellscha

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hapag Lloyd Aktiengesellschaft has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Hapag-Lloyd Aktiengesellscha is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha

The main advantage of trading using opposite COSCO SHIPPING and Hapag-Lloyd Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COSCO SHIPPING position performs unexpectedly, Hapag-Lloyd Aktiengesellscha can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hapag-Lloyd Aktiengesellscha will offset losses from the drop in Hapag-Lloyd Aktiengesellscha's long position.

The idea behind COSCO SHIPPING Holdings and Hapag Lloyd Aktiengesellschaft pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.